Oil prices showed a bloodbath as fears of US recession soars ahead of Fed policy.
The USD Index has extended its correction as Fed rate hikes were having a negative impact on the banking sector.
Oil inventory data from the US EIA will remain in the spotlight.
West Texas Intermediate (WTI), futures on NYMEX, are seeking support around $71.50 in the Asian session after a bloodbath on Tuesday. The black gold was heavily dumped as investors got cautious that more interest rate hikes from the Federal Reserve (Fed) will deepen fears of a recession in the United States.
Also, a delay in US debt ceiling talks is accelerating anxiety among market participants as US President Joe Biden is not interested in meeting with US Senate McCarthy if Republicans want negotiation.
Meanwhile, the US Dollar Index (DXY) has extended its correction to near 101.86 as a member of the Council of US Economic Advisers, Heather Boushey, said that interest rate hikes from the Fed were having a negative impact on the banking sector, as reported by Reuters.
Going forward, oil inventory data from the US Energy Information Administration (EIA) will remain in the spotlight.
The oil price is declining toward its annual low plotted from March 20 low at $64.39 on a daily scale. The black gold witnessed immense selling pressure after failing to surpass the horizontal resistance placed from January 23 high at $82.68.
The 10-period Exponential Moving Average (EMA) at $75.20 is acting as a barricade for the oil price.
Also, the Relative Strength Index (RSI) (14) has slipped below 40.00. Further downside seems possible amid the absence of divergence and oversold signals.
Oil bears will further drag the asset towards 09 December 2022 low at $70.27 and March 24 low at $66.88 after dropping below May 02 low at $71.37.
Alternatively, a confident break above April 03 low at $79.00 will drive the oil price toward April 04 high at $81.80 and April 12 high at $83.40.
WTI daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
You must log in to post a comment.